Did Value Investors Survive 1929-1932?

Discussion in 'Trading' started by short&naked, Jan 25, 2009.

  1. Indeed. Also, part of the problem Japan faced was an aging population that reached its stock purchasing peak. We are facing something similar on a larger scale. Unfortunately, I think this will apply to most stock markets over the next 15-20 years.
     
    #41     Jan 27, 2009
  2. At the end of the day, people need evaluate results and weigh it versus other options. The grand concept known as "opportunity cost". I could try to shovel money into a 401(k) and strive for the mythical 8% a year and lose "only" 20-30% for 2008 OR I could take matters into my own hands. Either way, my returns need to be weighed against "8%" a year. This (8% figure) is what I was taught in my college finance class.
     
    #42     Jan 27, 2009
  3. Sharpe ratios become a bit blurry with value investing. :D
     
    #43     Jan 27, 2009
  4. Also, some addition thoughts.

    In order to value invest you have to look at small/mid-cap stocks since these have the best chance of being mispriced (due in part to their low liquidity). However, just holding these kinds of securities presents new risks in a deflationary environment where default rates are higher among smaller companies.
     
    #44     Jan 27, 2009
  5. No, we should buy a "Large well capitalized company" (quote taken from the Intelligent Investor) just like AIG... :D
     
    #45     Jan 27, 2009
  6. Ups! My bad. :D
     
    #46     Jan 27, 2009